A Muscle Shoals man has agreed to plead guilty to obstructing an audit into his two pharmacies by Medicare - a move that will bring a $2.5 million penalty.

Rodney Dalton Logan, 63, was charged with obstructing a 2012 federal audit of Medicare claims submitted by his pharmacy, Leighton Pharmacy Inc.. The company did business as Sheffield Pharmacy and Homecare in Sheffield and Russellville Pharmacy in Russellville.

According to a news release from the U.S. Attorney's Office for the Northern District of Alabama, Logan was the lead pharmacist at both locations. The pharmacies operated as both retail and compounding pharmacies.

A compounding pharmacy prepares customized medications for patients by mixing the ingredients to create the medication.

The news release explains that CVS/Caremark Inc. administered prescription drug claims for Medicare Part D and served as an auditor on Medicare's behalf. Medicare Part D prohibits reimbursement to pharmacies for compounded medications made using bulk pharmaceutical powders, which the Russellville and Sheffield did as part of their day-to-day practice.

Despite that prohibition, Logan sought Part D reimbursement after February 2009 for compounded medications, primarily topical pain creams, made from bulk powders. His pharmacies, however, used the billing code for the tablet or capsule form of the ingredients.

When CVS/Caremark initiated the audit, Logan submitted falsified and misleading documents for the Sheffield pharmacy, stating that medications in tablet or capsule form were used as ingredients for the compounded prescriptions.

"This case revolves around the falsification of documents in an effort to defraud Medicare, which exists to provide health care services for the elderly," U.S. Attorney Joyce White Vance said in the news release. "My office and our law enforcement partners are committed to ensuring the integrity of government programs and to prosecuting those who would provide false information to criminally profit from those programs."

The maximum penalty for obstructing a federal audit is five years in prison and a fine of $250,000 or twice the amount improperly gained through the defendant's conduct. In Logan's case, that amount adds up to $2.5 million.

The FBI, the Department of Health and Human Services' Office of Inspector General and the Food and Drug Administration's Office of Criminal Investigation investigated the case. Assistant U.S. Attorney Chinelo Dike-Minor and trial attorney William Chang of the Justice Department's Criminal Division Fraud Section are prosecuting.